<PAGE>
 
                                                                   EXHIBIT 10.50


                          RADNOR HOLDINGS CORPORATION

                        SENIOR EXECUTIVE RETIREMENT PLAN
<PAGE>
 
                          RADNOR HOLDINGS CORPORATION
                        SENIOR EXECUTIVE RETIREMENT PLAN
                        --------------------------------


                               TABLE OF CONTENTS
                               -----------------

                                                                
<TABLE> 
<CAPTION> 
ARTICLE                                                    PAGE
-------                                                    ----
<S>                                                        <C>
I.     PURPOSE                                                1  
                                                               
II.    DEFINITIONS                                            1
                                                               
III.   PARTICIPATION; CONTRIBUTIONS                           5
                                                               
IV.    INVESTMENTS AND ALLOCATIONS                            6

V.     BENEFITS                                               9

VI.    VESTING                                               11
                                                               
VII.   DEATH BENEFIT                                         12
                                                               
VIII.  PROHIBITED ACTIVITIES                                 14
                                                               
IX.    ADMINISTRATION OF THE PLAN                            15 

X.     GENERAL PROVISIONS                                    18

XI.    ADOPTION                                              22
</TABLE>
<PAGE>
 
                          RADNOR HOLDINGS CORPORATION
                        SENIOR EXECUTIVE RETIREMENT PLAN
                        --------------------------------

ARTICLE I.  PURPOSE
-------------------

     The purpose of this Plan is to provide for the payment of supplemental
retirement benefits to certain designated senior executives of Radnor Holdings
Corporation and its affiliates as part of an integrated executive compensation
program intended to assist in attracting, motivating and retaining senior
executives of superior ability, industry and loyalty.

ARTICLE II.  DEFINITIONS
------------------------

     The following terms used in this Plan shall have the following meanings
unless a different meaning is clearly required by the context:

     2.1  "Active Participant" means a Participant who is also an active
           ------------------                                           
employee of the Employer.

     2.2  "Administrator" means the Plan Sponsor or any individual or
           -------------                                             
individuals appointed by the Plan Sponsor to be responsible for the
administration and operation of the Plan in accordance with Article IX hereof.

     2.3  "Application" means a written form by which a Participant agrees to
           -----------                                                       
participate in the Plan, by which the Participant elects to defer a fixed dollar
amount from his annual cash compensation and on which the Participant makes
certain other designations and elections as required thereon.

     2.4  "Benefit Commencement Date" means the first day of the month next
           -------------------------                                       
following the Normal Retirement Date on which a Participant retires or any
earlier date authorized by the Administrator for the commencement of benefit
payments.

     2.5  "Chairman of the Board" means the Chairman of the Board of Directors
           ---------------------                                              
of the Plan Sponsor, as it shall be constituted from time to time.

     2.6  "Code" means the Internal Revenue Code of 1986, as amended, any
           ----                                                          
successor statute of similar purpose and any regulations issued thereunder.

     2.7  "Cost of Insurance" means the annual term insurance cost of
           -----------------                                         
maintaining the death benefit coverage of each Insurance Policy in force, as
determined by the Insurer.
<PAGE>
 
     2.8   "Deferred Benefit Account" means the book account to which a
            ------------------------                                   
Participant's Deferral Contributions and Matching Contributions shall be
credited and to which the other adjustments provided for in Article IV hereof
shall be credited or debited, as the case may be.

     2.9   "Deferral Contribution" means the amount credited to a Participant's
            ---------------------                                              
Deferred Benefit Account pursuant to Section 3.3 hereof.

     2.10  "Effective Date" means January 1, 1998.
            --------------                        

     2.11  "Employer" means the Plan Sponsor and each Participating Company.
            --------                                                         
Except as used in Article VIII hereof, each reference to the singular shall be
deemed a reference to each Employer individually.  In Article VIII "Employer" is
intended to refer to the Plan Sponsor and each Participating Company together.

     2.12  "Enrollment Period" means the initial period of forty-five days
            -----------------                                             
commencing on the date an individual becomes a Senior Executive, provided that
if there is less than forty-five days until the Senior Executive's initial Entry
Date, the initial Enrollment Period shall be shortened to the period preceding
such Entry Date.  Apart from this initial Enrollment Period, Enrollment Period
means for each Plan Year the period from November 1 to December 15 immediately
preceding the first day of such Plan Year.

     2.13  "Entry Date" means the first day of January, April, July and October.
            ----------                                                          

     2.14  "Insurance Policy" or "Policy" means each Pacific Life Custom COLI
            ----------------      ------                                     
Flexible Premium Variable Life Insurance Policy, including any rider thereto,
("Pacific Life Policy") owned by the Rabbi Trust, insuring the life of a
Participant and naming the Rabbi Trust as the beneficiary or any similar policy
which may be obtained hereafter either as a substitute for, or as an addition
to, a Pacific Life Policy.

     2.15  "Insurer" means the life insurance company that has issued an
            -------                                                     
Insurance Policy on the life of a Participant pursuant to this Plan.

     2.16  "Investment Option" means any investment vehicle deemed to be made
            -----------------                                                
available under the Plan.  With respect to amounts deemed to be invested in a
Policy on the life of a Participant, such Investment Options may include, but
are not limited to, each of the separate mutual fund variable accounts available
under such Policy.  With respect to the amounts credited to the Deferred Benefit
Accounts which are not deemed to be invested in

                                       2
<PAGE>
 
a Policy, Investment Options may include, but are not limited to, each of the
mutual funds or other investment vehicles selected by the Administrator and
deemed available for investment of the assets held by the Rabbi Trust.

     2.17  "Marginal Tax Rate" means the sum of (a) the highest marginal tax
            -----------------                                               
rate, including any surcharge, that could be applicable to the Plan Sponsor for
federal income tax purposes for the taxable year for which the determination is
being made and (b) the tax-effected composite of the highest marginal tax rates,
including any surcharges, for state income tax purposes, e.g., the product of
(i) the composite of the highest marginal state tax rates imposed on the members
of the Plan Sponsor's consolidated group and (ii) one minus the federal marginal
highest tax rate, that apply to the Plan Sponsor and its affiliates for the same
taxable year being used for purposes of part (a), above.  For example, the 1998
Marginal Tax Rate (assuming the composite of the highest marginal state tax
rates is ten percent (10%)) is the sum of 35% (the highest marginal federal tax
rate) and 6.5% (the tax-effected composite marginal state tax rate).

     2.18  "Matching Contribution" means the amount credited to a Participant's
            ---------------------                                              
Deferred Benefit Account pursuant to Section 3.4 hereof.

     2.19  "Memorandum" means the Offering Memorandum, dated May 1, 1997 and
            ----------                                                      
supplemented as of September 1, 1997, for the Pacific Life Policy, as it may be
further supplemented or amended from time to time, and any other similar
offering memorandum for any other Insurance Policy.  The terms and conditions of
each such Memorandum shall be deemed incorporated herein by this reference.

     2.20  "Normal Retirement Date" means the date on which a Participant who
            ----------------------                                           
has both attained age 65 and completed at least five Years of Active
Participation retires from his Employer.

     2.21  "Participant" means a current or former Senior Executive who elected
            -----------                                                        
to participate by completing an Application, who is receiving, or who may become
eligible to receive, a benefit under the Plan and for whom a Deferred Benefit
Account is being maintained.

     2.22  "Participating Company" means WinCup Holdings, Inc., StyroChem U.S.,
            ---------------------                                              
Inc., Radnor Management, Inc. and any other eligible employer that in accordance
with Section 9.7 hereof has agreed to adopt and to become a party to the Plan
and the Trust Agreement with the approval of the Chairman of the Board.

                                       3
<PAGE>
 
     2.23  "Plan" means the Radnor Holdings Corporation Senior Executive
            ----                                                        
Retirement Plan, as set forth herein and as it may be amended from time to time.

     2.24  "Plan Sponsor" means Radnor Holdings Corporation, a Delaware
            ------------                                               
corporation and any successor to its business.

     2.25  "Plan Year" means January 1, 1998 to December 31, 1998 and each
            ---------                                                     
calendar year thereafter during which this Plan remains in effect.

     2.26  "Rabbi Trust" means the grantor trust and trust fund, of which the
            -----------                                                      
Plan Sponsor is the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A of the Code, and which is established and maintained
pursuant to the terms of the Trust Agreement.

     2.27  "Senior Executive" means an officer, general manager, salesman or
            ----------------                                                
other senior executive who is a member of a select group of management or
highly-compensated employees employed by an Employer and who the Chairman of the
Board has designated as eligible to participate in this Plan.

     2.28  "Trust Agreement" means the agreement and declaration of trust
            ---------------                                              
executed pursuant to Section 9.5 hereof.

     2.29  "Trustee" means the corporate trustee or one or more individuals,
            -------                                                         
collectively, appointed and acting as trustee under the Trust Agreement and such
successor and additional trustees as shall be named pursuant to the terms of the
Trust Agreement.

     2.30  "Valuation Date" means the last day of each calendar quarter ending
            --------------                                                    
after the Effective Date, and for each Participant whose employment has
terminated, the date of such termination.

     2.31  "Years of Active Participation" means the quotient (rounded to the
            -----------------------------                                    
next lower whole number) obtained by dividing (i) the number of months of
participation by an Active Participant, completed during the period from the
effective date of an Active Participant's initial deferral election to the
earlier of the date on which an Active Participant no longer has a balance in
his Deferred Benefit Account or the date on which he is no longer an employee of
the Employer, by (ii) twelve (12).  Participation, active or otherwise, shall
also cease following the termination of the Plan.  Separate periods for which a
Participant is credited with Years of Active Participation, but which are
separated by one or more periods which do not qualify as participation by an
Active Participant, shall be aggregated for purposes of determining the
Participant's total Years of Active Participation.

                                       4
<PAGE>
 
ARTICLE III.  PARTICIPATION; CONTRIBUTIONS
------------------------------------------

     3.1  Commencement of Participation.  Each individual when first designated
          -----------------------------                                        
a Senior Executive shall be initially eligible to commence participation on the
immediately following Entry Date.  In order to commence his participation a
Senior Executive must file an Application with the Administrator during the
initial Enrollment Period.  If the Senior Executive fails to commence
participation in this Plan on the initial Entry Date, the Senior Executive shall
thereafter commence participation on the January 1st next following the
Enrollment Period during which his initial Application is filed with the
Administrator.  Participation in the Plan is voluntary.  Prior to a Senior
Executive's commencement of participation in the Plan, the Administrator shall
provide each Senior Executive with a copy of the most recent prospectus
associated with each Investment Option and shall make available a copy of the
Memorandum to each Senior Executive who requests a copy to review.  Each Senior
Executive shall be considered to be familiar with the terms and conditions of
the Memorandum regardless of whether the Senior Executive has requested a copy
to review.  By applying to become an Active Participant, a Senior Executive
shall be deemed conclusively to have assented to the provisions of this Plan and
all amendments hereto.

     3.2  Re-Employment.  If a Participant whose employment with the Employer
          -------------                                                      
has been terminated is subsequently re-employed, he shall not become an Active
Participant until he is again designated as a Senior Executive and he applies to
commence participation in accordance with the provisions of Section 3.1 hereof.

     3.3  Participant Deferral Election.
          ----------------------------- 

          3.3.1  In a Participant's initial Application the Participant shall
direct his Employer to reduce his annual cash compensation by a fixed dollar
amount which in turn shall be credited by the Administrator to the Participant's
Deferred Benefit Account within no more than thirty days after the date on which
the Participant would have otherwise received such deferred amount as current
compensation. A Participant's compensation deferrals shall be made through
periodic payroll reductions.

          3.3.2  As a condition of becoming a Participant, a Senior Executive
must agree that his initial deferral election shall be irrevocable for a period
of five consecutive years ending on the day before the fifth anniversary of the
effective date of such deferral election. In the event that this condition is
not satisfied, the Employer shall pay to the Participant within 90 days of the
revocation of the Participant's initial deferral election an amount equal to the
lesser of (i) the

                                       5
<PAGE>
 
product of the cash surrender value of the Policy insuring the Participant's
life and a fraction, the numerator of which shall be an amount equal to the
aggregate Deferral Contributions credited to the Participant's Deferred Benefit
Account and the denominator of which shall be the sum of the aggregate Deferral
Contributions and Matching Contributions credited to the Participant's Deferred
Benefit Account or (ii) the Participant's aggregate Deferral Contributions.  The
Participant's participation in this Plan shall cease upon receipt of this
payment and the unpaid balance in the Participant's Deferred Benefit Account
shall be forfeited.  If such Senior Executive again chooses to become a
Participant, each subsequent deferral election shall be treated as an initial
deferral election until the five year requirement set forth in this Section
3.3.2 has been satisfied.

          3.3.3  Once a Participant has maintained a single deferral election in
effect for at least five years, the Participant may from time to time thereafter
change his deferral election by a notice provided to the Administrator or its
designee in writing or in any other form acceptable to the Administrator during
any Enrollment Period. In the absence of any such change, the Participant's
deferral election shall continue in force indefinitely.

     3.4  Matching Contribution.  By no later than the last day of each Plan
          ---------------------                                             
Year, the Employer shall credit a Matching Contribution to each Active
Participant's Deferred Benefit Account in an amount equal to 100% of such
Participant's Deferral Contributions made during such Plan Year, provided that
in no event shall a Matching Contribution greater than $10,000 be credited to
any Active Participant's Deferred Benefit Account for any Plan Year.

ARTICLE IV.  INVESTMENTS AND ALLOCATIONS
----------------------------------------

     4.1  Deferred Benefit Accounts.  A Deferred Benefit Account shall be
          -------------------------                                      
established and maintained in the name of each Participant which shall become
vested in the Participant as specified in Article VI hereof and to which shall
be credited or debited, as the case may be:  (i) amounts equal to the
Participant's Deferral Contributions; (ii) amounts equal to the Employer's
Matching Contributions; (iii) any deemed earnings and losses allocated to the
Deferred Benefit Account; (iv) any taxes due with respect to earnings credited
to the Deferred Benefit Account; and (v) the fees, taxes, Cost of Insurance and
other charges or expenses which must be debited from the Deferred Benefit
Account in accordance with the terms of any Investment Option in which all or
any portion of the balance in a Deferred Benefit Account is deemed invested.

                                       6
<PAGE>
 
     4.2  Allocation of Investment Results.  Pursuant to Section 4.5 hereof,
          --------------------------------                                  
each Participant shall have the right to direct the Administrator as to how
amounts credited to his Deferred Benefit Account shall be deemed to be invested
among the Investment Options made available under the Plan.  As of each
Valuation Date the Administrator shall determine the increase or decrease in the
deemed value of each Investment Option since the last Valuation Date and shall
allocate that deemed investment experience plus any earnings, gains and losses
deemed realized by the Trust among the Participants' Deferred Benefit Accounts
based on the amount from each Deferred Benefit Account deemed invested in each
Investment Option.  Such investment experience shall be net of any Cost of
Insurance, fees, taxes or other charges or expenses incurred with respect to any
Investment Option either at the time a deemed investment is made or thereafter.
For this purpose, the deemed value of an Insurance Policy on any Valuation Date
shall be its then cash surrender value, as determined by the Insurer.

     4.3  Accounting for Distributions.  As of the date of any distribution
          ----------------------------                                     
hereunder, the distribution to a Participant or his beneficiary shall be debited
from such Participant's Deferred Benefit Account.  Such amount shall be charged
on a pro rata basis against the Investment Options in which the Participant's
account balance is deemed to be invested.

     4.4  Allocation Not Equivalent of Vesting.  The fact that an allocation has
          ------------------------------------                                  
been made pursuant to this Article IV will not operate to vest in a Participant
any right, title or interest in or to any benefit under the Plan.  Vesting of
such benefits shall occur only in accordance with the provisions of Article VI
hereof.

     4.5  Investment Directions of Participants.  Subject to such limitations as
          -------------------------------------                                 
may from time to time be required by law or by this Plan or as may be imposed by
the Administrator or the Trustee and further subject to the operating rules and
procedures set forth in this Section 4.5 or such rules and procedures as may be
imposed from time to time by the Administrator or the Trustee, each Participant
may communicate to the Administrator or its designee in such manner and
frequency as shall be designated by the Administrator a direction as to how the
amounts credited to his Deferred Benefit Account should be deemed to be invested
(in any whole percentage) among the Investment Options.  Such election shall
separately designate a deemed investment (i) for that portion of the
Participant's Deferred Benefit Account attributable to amounts that have been
credited to that account prior to the date on which such direction shall become
effective, and (ii) for that portion of the Participant's Deferred Benefit
Account credited thereto after the date on which such direction shall become
effective.  Such directions shall become effective subject to the following
rules and procedures:

                                       7
<PAGE>
 
          4.5.1  Any initial or subsequent investment direction shall be made
during an Enrollment Period on the Application or on any other form or in any
other manner authorized by the Administrator or its designee and shall be
effective as of the date which is no more than thirty (30) days (or such shorter
period as the Administrator may determine) after the filing of the appropriate
form or after the receipt of any other authorized form of communication by the
Administrator or its designee.

          4.5.2  All amounts credited to a Participant's Deferred Benefit
Account shall be deemed to be invested in accordance with the Participant's then
effective investment direction.  As of the effective date of any new investment
direction, all or a portion of the Participant's Deferred Benefit Account on
that date shall be reallocated among the designated Investment Options according
to the new investment direction and in the percentages specified in that
investment direction unless and until a subsequent investment direction shall be
filed and become effective.

          4.5.3  If the Administrator receives an investment direction which it
finds is incomplete, unclear or improper, the Participant's investment direction
then in effect shall remain in effect (or, in the case of a deficiency in an
initial investment direction, the Participant shall be deemed to have filed no
investment direction) until an effective direction is received, unless the
Administrator permits corrective action prior thereto.

          4.5.4  If the Administrator possesses at any time a direction as to
the deemed investment of less than all of the balance in a Participant's
Deferred Benefit Account, the Participant shall be considered to have directed
that the undesignated portion of the Deferred Benefit Account be deemed to be
invested in the fixed income account of any Investment Option.

     4.6  Payment of Fees and Expenses.  As of each Valuation Date,
          ----------------------------                             
recordkeeping fees and Trustee fees, if any, of the Plan and the Rabbi Trust and
any other professional fees or expenses incurred in connection with the
operation of the Plan and the Rabbi Trust since the last Valuation Date shall be
paid by the Trustee out of the Rabbi Trust, unless the Administrator, in its
sole discretion, determines to provide for the payment of such fees and
expenses.  If payment is made from the Rabbi Trust, a Participant's allocable
share of such payment shall be ratably debited from the balance in the
Participant's Deferred Benefit Account.

     4.7  No Actual Investment Obligation.  Notwithstanding the existence of the
          -------------------------------                                       
Rabbi Trust, each Deferred Benefit Account shall be a bookkeeping entry only.
Neither the Employer nor the Trustee shall be obligated to purchase or maintain
any asset in connection with the establishment and maintenance of the Deferred

                                       8
<PAGE>
 
Benefit Accounts, and any reference to investments or Investment Options is
solely for the purpose of computing the value of benefits under this Plan.  To
the extent a Participant, beneficiary or any other person acquires a right to
receive payments under this Plan, that right shall be no greater than the right
of any unsecured general creditor of the Employer.  Neither this Plan nor any
action taken pursuant to the terms of this Plan shall be considered to create a
fiduciary relationship between the Employer and any Participant or any other
person or to establish a trust in which the assets are protected against the
claims of any unsecured general creditor of the Employer.

ARTICLE V.  BENEFITS
--------------------

     5.1  Normal Pension Benefit.  Except as otherwise provided in Sections 5.5
          ----------------------                                               
and 6.3 hereof, if a Participant retires on a Normal Retirement Date his
Employer shall pay to him an annual pension, as defined in Section 5.1.1 hereof,
for each year ending before the fifteenth anniversary of his Benefit
Commencement Date.  This annual pension shall be paid in monthly installments,
commencing on the Participant's Benefit Commencement Date and continuing to be
paid on the first day of each subsequent month during the fifteen year payment
period.

          5.1.1  The amount of a Participant's annual pension shall be the
product of the annual benefit fraction and the total pension amount, where:

                 5.1.1.1  the annual benefit fraction shall be 1/15 for the
first year, 1/14 for the second year, 1/13 for the third year, and so forth
(i.e., the denominator for each succeeding year being one less than the
denominator in effect during the previous year).

                 5.1.1.2  the total pension amount for each Plan Year shall be
the amount credited to the Participant's Deferred Benefit Account as of the
Valuation Date immediately preceding the Benefit Commencement Date and each
anniversary thereof.

          5.1.2  A Participant who is entitled to a normal pension benefit shall
also be paid a monthly supplemental pension benefit for as long as the normal
pension benefit is being paid equal to the product of his monthly normal pension
benefit and the Marginal Tax Rate, divided by one minus the Marginal Tax Rate.

     5.2  Vested Annual Pension.  Except as otherwise provided in Sections 5.5
          ---------------------                                               
and 6.3 hereof, if a Participant who has completed at least 20 Years of Active
Participation terminates employment with the Employer before reaching his
earliest Normal Retirement Date, his Employer shall pay to him a vested annual
pension in an

                                       9
<PAGE>
 
amount equal to the annual pension and the supplemental pension, determined
pursuant to Section 5.1 hereof as of the Valuation Date immediately preceding
the first day of the month that follows what would have been the Participant's
earliest Normal Retirement Date.  The payment of the vested annual pension shall
commence on the Benefit Commencement Date following such Normal Retirement Date
and shall continue to be paid for each year ending before the fifteenth
anniversary of his Benefit Commencement Date.  This vested annual pension shall
be paid in monthly installments, on the first day of each month during the
fifteen year payment period.

     5.3  Limited Annual Pension.  Except as otherwise provided in Sections 5.5
          ----------------------                                               
and 6.3 hereof, if a Participant who has more than five, but less than twenty,
Years of Active Participation terminates employment with the Employer before
reaching his earliest Normal Retirement Date, his Employer shall pay to him a
limited annual pension, as defined in Section 5.4 hereof, beginning on the
Benefit Commencement Date following what would have been the Participant's
earliest Normal Retirement Date, for each year ending before the fifteenth
anniversary of his Benefit Commencement Date.  This benefit shall be paid in
monthly installments on the first day of each month during the fifteen year
payment period.

     5.4  Amount of Limited Annual Pension.  The amount of the limited annual
          --------------------------------                                   
pension shall be the product of the annual benefit fraction and the total
limited annual pension amount, where:

          5.4.1  the annual benefit fraction shall be as defined in Section
5.1.1.1 hereof; and

          5.4.2  the total limited annual pension amount for each Plan Year
shall be the vested portion of the amount credited to the Participant's Deferred
Benefit Account as of the Valuation Date immediately preceding the Participant's
Benefit Commencement Date and each anniversary thereof;

          5.4.3  a Participant who is entitled to a limited annual pension shall
also be paid a monthly supplemental pension benefit for as long as the limited
annual pension is paid equal to the product of the monthly limited pension
amount and the Marginal Tax Rate, divided by one minus the Marginal Tax Rate.

     5.5  Forfeiture of Benefit Payments and Other Amounts.  In addition to (and
          ------------------------------------------------                      
not in derogation of) the forfeitures provided for in Section 6.3 hereof, if at
any time while a Senior Executive is a Participant, he breaches any of the
covenants relating to confidential information, nonsolicitation or
noncompetition set forth in Article VIII hereof, the portion of the
Participant's Deferred Benefit Account attributable to

                                       10
<PAGE>
 
Matching Contributions shall be forfeited and all payments derived from such
Matching Contributions that may be required under this Plan following such
breach shall cease and be forfeited.  Thereafter, the Employer shall recalculate
such Participant's annual pension amount as if he had terminated employment with
less than twenty Years of Active Participation, as provided in Section 5.4
hereof.  All forfeitures arising pursuant to this Section 5.5 or any other
provision of this Plan shall be used to reduce the amount of Matching
Contributions that the Employer is required to make with respect to the Plan
Year in which the forfeitures arose.

     5.6  Form of Payment.  All distributions under the Plan shall be made in
          ---------------                                                    
cash or cash equivalents.

ARTICLE VI.  VESTING
--------------------

     6.1  Retirement Date.  Except as otherwise provided in Sections 5.5 and 6.3
          ---------------                                                       
hereof, a Participant shall have a 100% vested interest in the balance in his
Deferred Benefit Account if he retires from the Employer on a Normal Retirement
Date.

     6.2  Termination Prior to Retirement Date.  Except as otherwise provided in
          ------------------------------------                                  
Sections 5.5 and 6.3 hereof, the vested interest of a Participant whose
employment terminates before his earliest Normal Retirement Date shall be:

          6.2.1  100% of that portion of the balance in the Participant's
Deferred Benefit Account that is equal to the product of such balance and a
fraction, the numerator of which is the Participant's aggregate Deferral
Contributions and the denominator of which is the sum of the Participant's
aggregate Deferral and Matching Contributions, if the Participant has completed
less than 20 Years of Active Participation.

          6.2.2  100% of the balance credited to his Deferred Benefit Account,
if the Participant has completed at least 20 Years of Active Participation.

     6.3  Forfeiture.  Except as hereinafter provided, a Participant shall
          ----------                                                      
forfeit his right to an annual pension in the event he dies before receiving
payment of his annual pension for the entire fifteen year payment period or in
the event the Employer terminates the Participant's employment for cause.  In
the latter event, the Participant shall only be entitled to the payment of an
amount determined under Section 3.3.2 hereof as if the Participant had not
satisfied the condition described in that section.  For purposes of this Section
6.3 "cause" shall have one of the following meanings:

                                       11
<PAGE>
 
          6.3.1  If the Participant has an employment agreement with the
Employer that defines what constitutes a termination for "cause" for purposes of
that agreement, such definition shall also apply to this Plan; and

          6.3.2  In all other cases, "cause" shall mean:

                 6.3.2.1 fraud, theft, misappropriation or embezzlement of the
Employer's funds;

                 6.3.2.2  conviction of any felony, crime involving fraud or
misrepresentation, or any other crime (whether or not connected with his
employment) the effect of which is likely to adversely affect the Employer;

                 6.3.2.3  abuse of alcohol, drugs or other controlled substances
which interferes with the performance by the Participant of his employment
duties; or

                 6.3.2.4  failure to substantially perform the Participant's
employment duties, which failure continues uncured for a period of more than
thirty (30) days and which failure is not principally caused by a physical or
mental disability of the Participant.

          6.3.3  Notwithstanding the foregoing provisions of Section 6.3 or any
other provision hereof, a Participant shall not be deemed to have been
terminated for cause unless there shall have been delivered to the Participant a
letter signed by the Chairman of the Board, stating that, in the good faith
opinion of the Chairman of the Board, the Participant was guilty of conduct
described in Section 6.3.2 hereof and specifying the particulars thereof in
reasonable detail.

ARTICLE VII.  DEATH BENEFIT
---------------------------

     7.1  Death after Pension Commencement.  If a Participant dies after the
          --------------------------------                                  
commencement of his pension benefit under Section 5.1, 5.2 or 5.3 hereof, but
before he receives 180 monthly installments, then, except as otherwise provided
in Section 7.5 hereof, the Employer shall pay to the Participant's beneficiary
an amount determined in accordance with Section 7.3 hereof.

     7.2  Death before Pension Commencement.  If a Participant dies before his
          ---------------------------------                                   
pension benefit has commenced under Section 5.1, 5.2 or 5.3 hereof, then, except
as otherwise provided in Section 7.5 hereof, the Employer shall pay to the
Participant's beneficiary an amount determined in accordance with Section 7.3
hereof.

     7.3  Amount of Death Benefit.  The amount of the death benefit provided
          -----------------------                                           
under the conditions set forth in Sections 7.1 and 7.2 hereof 

                                       12
<PAGE>
 
shall be an amount equal to the proceeds of the Policy, if any, insuring the
Participant's life, reduced by an amount equal to the sum of (i) the aggregate
Matching Contributions made to the Participant's Deferred Benefit Account and
(ii) an amount equal to the product of the Participant's aggregate Deferral
Contributions and the Marginal Tax Rate (Such reduced amount is hereafter
referred to as the "net proceeds.") and then further supplemented by a portion
of the proceeds equal to the product of the net proceeds and the Marginal Tax
Rate, divided by one minus the Marginal Tax Rate.

     7.4  Beneficiary Designation.  Any death benefit payable pursuant to this
          -----------------------                                             
Article VII shall be paid to the beneficiary designated by the Participant.
Such designation and any subsequent change of designation shall be made in
writing on an appropriate form and shall be filed with the Administrator.  If
more than one beneficiary has been designated and survives the Participant, the
Employer shall pay the benefit in equal shares to the designated surviving
beneficiaries, unless a different proportion has been directed.  If no
designated beneficiary survives the Participant, the death benefit shall be paid
to the Participant's estate.

     7.5  Insurance Policies.  It is the Employer's expectation that the death
          ------------------                                                  
benefits provided for in this Article VII shall be provided through the purchase
of an Insurance Policy on each Participant's life.  These Insurance Policies
will be owned by the Rabbi Trust and the Rabbi Trust will be designated as the
sole beneficiary thereof.  Each Participant shall provide the Administrator with
such information as it may require in order to enable the Trustee to apply for
such insurance and to cooperate fully with the Administrator in respect of such
application, including, without limitation, the taking of a physical
examination, if requested to do so.

          7.5.1  Notwithstanding the foregoing provisions of this Section 7.5,
in the event the Insurer to which an application for insurance coverage is made
declines to issue an Insurance Policy at standard premium rates, the
Administrator may determine not to purchase a Policy on such terms and may, in
its sole discretion, determine to make other arrangements for the payment of an
alternative death benefit hereunder. Such alternative arrangements may include,
without limitation, purchasing additional life insurance on the life of a
Participant who is insurable at standard premium rates.

          7.5.2  If a Participant should die while employed and the proceeds of
the Policy on the Participant's life are not paid to the Rabbi Trust because the
information the Participant

                                       13
<PAGE>
 
furnished in connection with the issuance of such Policy was materially false or
the Participant's death was caused by suicide within two years of the date of
issuance of such Policy, the Employer will be under no obligation to pay the
death benefit provided under this Article VII.  In that event the Participant's
beneficiary shall be entitled to the amount, if any, in the Participant's
Deferred Benefit Account after the Employer has recovered its costs (including
lost tax deductions), as described in Section 7.3(i) and (ii) hereof.

ARTICLE VIII.  PROHIBITED ACTIVITIES
------------------------------------

     8.1  Noncompetition and Nonsolicitation.  As a condition to the payment of
          ----------------------------------                                   
benefits hereunder, each Participant shall refrain during his employment and
during the entire period preceding his receipt of all payments due to him
pursuant to Article IV hereof from engaging in all of the following activities:

          8.1.1  Entering into or engaging, directly or indirectly, in any
business (either financially or as a shareholder, employee, officer, partner,
independent contractor, or owner) which is competitive with the business of the
Employer, provided that nothing herein shall prevent a Participant from
investing in the securities of any company which are publicly traded so long as
his investment does not give him any voice in the management or conduct of the
affairs of such company;

          8.1.2  Soliciting business, accepting any business from or otherwise
doing, or contracting to do, business with any person or entity who at any time
during the Participant's period of employment with the Employer was an active
customer or was actively solicited by the Employer according to the books and
records of the Employer; or

          8.1.3  Soliciting, enticing, persuading, inducing, requesting or
otherwise causing any employee, officer or agent of the Employer to refrain from
rendering services to the Employer or to terminate his relationship, contractual
or otherwise, with the Employer.

     8.2  Nondisclosure Covenant.  Each Participant covenants and agrees that he
          ----------------------                                                
will not, except in the performance of his duties on behalf of the Employer,
communicate or disclose to any person (other than the Employer and its
employees), or use for his own account, without the prior written consent of an
authorized representative of the Employer, any Confidential Information (as
hereinafter defined) which was obtained or acquired by the Participant during
his employment with the Employer.  The Participant (i) shall retain such
Confidential Information in trust for the sole benefit of the Employer and its
successors and assigns, and (ii) shall promptly deliver to the Employer all

                                       14
<PAGE>
 
tangible evidence of such Confidential Information prior to, or at the
termination of, his employment with the Employer.  For purposes of this
Agreement, "Confidential Information" shall mean any and all knowledge and
information relating to the business affairs of the Employer, their products,
processes and/or services and their customers, creditors, shareholders,
suppliers, contractors, agents, consultants and employees, including (but not
limited to) the provisions of this Plan, provided, however, that Confidential
Information shall not include any information which may be in the public domain
or have come into the public domain not as a result of a breach by the
Participant of his covenant hereunder.

ARTICLE IX.  ADMINISTRATION OF THE PLAN
---------------------------------------

     9.1  Powers and Duties of the Administrator.  The Administrator shall be
          --------------------------------------                             
responsible for the operation and administration of the Plan, and shall have
such powers as may be necessary or appropriate to carry out the provisions of
the Plan and to perform its duties hereunder, including the power:

          9.1.1  To engage such persons as it deems necessary or advisable to
assist in the administration of the Plan or to render advice with respect to the
responsibilities of the Administrator under the Plan, including accountants,
actuaries and attorneys.

          9.1.2  To make use of the services of employees of the Employer in
administrative matters.

          9.1.3  To obtain and act on the basis of all tables, valuations,
certificates, opinions, and reports furnished by the persons described in
Section 9.1.1 or 9.1.2 hereof.

          9.1.4  To determine all benefits and resolve all questions pertaining
to the administration and interpretation of the Plan, either by rules of general
applicability or by particular decisions. To the maximum extent permitted by
law, all interpretations of the Plan and other decisions of the Administrator
shall be conclusive and binding on all parties.

          9.1.5  To adopt such forms, rules and regulations as it shall deem
necessary or appropriate for the administration of the Plan and the conduct of
its affairs, provided that any such forms, rules and regulations shall not be
inconsistent with the provisions of the Plan.

          9.1.6  To remedy any inequity from any incorrect information received
by, or communicated to, the Administrator or from administrative error.

                                       15
<PAGE>
 
          9.1.7  To commence or defend in any legal or administrative proceeding
any litigation arising from the operation of the Plan.

          9.1.8  To direct the Trustee as to how to make all elections required
by the Insurance Policies, including, but not limited to, the selection of a
death benefit qualification test, and to direct the Trustee to take whatever
actions the Administrator deems necessary or appropriate in order to avoid
having an Insurance Policy become a "modified endowment contract," as defined in
Code section 7702A.

     9.2  Required Information.  A Participant and any beneficiary eligible to
          --------------------                                                
receive benefits under the Plan shall furnish to the Administrator any
information or proof requested by the Administrator and reasonably required for
the proper administration of the Plan, including, but not limited to, the
information required to obtain an Insurance Policy, as provided for in Section
7.5 hereof.  Failure on the part of a Participant or beneficiary to comply with
any such request within a reasonable period of time shall be sufficient grounds
for delay in the payment of benefits under the Plan until such information or
proof is received by the Administrator.

     9.3  Nonuniform Determinations.  Neither the Administrator's, the Plan
          -------------------------                                        
Sponsor's or the Chairman of the Board's determinations or interpretations under
the Plan need be uniform and may be made by the Administrator, the Plan Sponsor
or the Chairman of the Board selectively among Participants (whether or not such
Participants are similarly situated).  Without limiting the generality of the
foregoing, the Administrator and the Chairman of the Board shall be entitled,
among other things, (a) to make nonuniform and selective determinations with
respect to the acceleration of vesting, (b) the commencement of benefit
payments, (c) the selection of Investment Options and (d) any other matters
regarding the administration or operation of the Plan as to which either is
responsible.  Moreover, the Administrator, the Plan Sponsor or the Chairman of
the Board may elect, in his or its sole discretion, to waive any requirement or
restriction set forth in the Plan without being required to implement the same
or a similar waiver for the same Participant at a future time or for other
similarly situated Participants.

     9.4  Claims Procedure and Review.
          --------------------------- 

          9.4.1  Claims for benefits under the Plan shall be filed in writing by
a claimant with the Administrator. Within 60 days after receipt of such claim,
the Administrator shall act on the claim and shall notify the claimant in
writing as to whether the claim has been granted in whole or in part; provided,
however, if the claimant has not received written notice of

                                       16
<PAGE>
 
such decision within such 60-day period, the claimant shall, for the purpose of
Section 9.4.3 hereof, regard his claim as having been denied.

          9.4.2  Any notice of denial of a claim, in whole or in part, shall set
forth (i) the specific reason or reasons for the denial, (ii) reference to the
Plan provisions on which the denial is based, and (iii) a copy of the Plan's
claims and review provisions.

          9.4.3  Any claimant who has had a claim denied, in whole or in part,
under the Plan shall be entitled, upon the filing of a written request for
review with the Administrator within 60 days after receipt by the claimant of
written notice of such denial (or, if the claimant had not received written
notice of the decision within the 60-day period described in Section 8.5.1
hereof, within 120 days of receipt of the claim form by the Administrator), to
appeal the denial of his claim to the Administrator.

          9.4.4  The claimant shall be entitled in connection with such appeal
to examine pertinent documents and submit issues and comments in writing to the
Administrator. Any decision on review by the Administrator shall be in writing,
and shall include specific reasons for the decision (including reference to the
Plan provisions on which the decision is based). Such decision shall be made by
the Administrator not later than 60 days after receipt by it of the claimant's
request for review.

     9.5  Designation of Trustee.  The Chairman of the Board shall name and
          ----------------------                                           
designate a Trustee and shall enter into a Trust Agreement for the purpose of
establishing the Rabbi Trust.  The Chairman of the Board shall have the power,
by a written instrument, to amend the Trust Agreement, remove the Trustee, and
designate a successor Trustee, as provided in the Trust Agreement.

     9.6  Litigation.  In any action or judicial proceeding affecting the Plan
          ----------                                                          
and the Rabbi Trust, it shall be necessary to join as a party only the Plan
Sponsor.  Except as may be otherwise required by law, no Participant or
beneficiary shall be entitled to any notice or service of process, and any final
judgment entered in such action shall be binding on all persons interested in,
or claiming under, the Plan.

     9.7  Adoption by Participating Companies.
          ----------------------------------- 

          9.7.1  This Plan may be adopted by any parent, subsidiary, related or
affiliated company which the Chairman of the Board shall designate and declare
as eligible to adopt and

                                       17
<PAGE>
 
participate in the Plan (an "adopting company"), subject to the following
conditions:

                  9.7.1.1  Each employer who becomes an adopting company after
the Effective Date shall execute and deliver such instruments as the Chairman of
the Board shall deem necessary or desirable, including an instrument evidencing
the joinder of the adopting company in the Plan and Trust Agreement; and

                  9.7.1.2  Each adopting company shall designate the Chairman of
the Board as its agent to act for it in all transactions regarding the Plan,
including, without limitation, its amendment and termination, as provided by
Article X hereof, as well as its administration, as provided by this Article IX.

           9.7.2  In the event of such adoption, the Administrator designated by
the Chairman of the Board shall thereafter also act as the Administrator for the
adopting company.

           9.7.3  The Plan shall be effective with respect to each adopting
company and its employees on such date as shall be specified in the resolutions
of such company's board of directors, authorizing the adoption of the Plan.

           9.7.4  The Participating Companies on the Effective Date shall be
deemed to have satisfied the conditions set forth in this Section 9.7 by virtue
of their participation in the Plan.

     9.8   Withdrawal from Plan.  Any Participating Company may withdraw from
           --------------------                                              
this Plan at any time by giving ninety (90) days prior written notice to the
Administrator.  Such withdrawal shall be treated as a partial termination with
respect to the Participants to whom such withdrawal applies.  The withdrawing
Employer shall thereafter cease to participate in this Plan and its Senior
Executives shall cease to be eligible to participate in the Plan.

ARTICLE X.  GENERAL PROVISIONS
------------------------------

     10.1  Funding.  This Plan shall be unfunded and credits to the Deferred
           -------                                                          
Benefit Account of each Participant shall not be set apart nor otherwise made
available so that they may be drawn upon at any time, except as provided in this
Plan.  Neither any Participant nor any beneficiary shall have any rights, title
or interest in such credits or any claim against them.  Payments shall only be
made at such times and in the manner expressly provided in the Plan, and the
Employer shall only have a contractual obligation to make the payments when due.
No notes or security for the payment of any Participant's benefit shall be
issued or provided by the Employer.  Except as otherwise provided

                                       18
<PAGE>
 
for in the Trust Agreement, payment of benefits hereunder shall be made from the
general assets of the Employer.

     10.2  Nonalienation.  No Participant or beneficiary shall pledge,
           -------------                                              
hypothecate, anticipate, assign or in any way create a lien upon any amounts
provided under this Plan, and no benefit payable hereunder shall be assignable
in anticipation of payment either by voluntary or involuntary acts, or by
operation of law.  Moreover, no benefit payable under the Plan shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of the person entitled thereto.  Further, (i) withholding
of taxes from Plan benefit payments, (ii) the recovery under the Plan of
overpayments of benefits previously made to a Participant or beneficiary, (iii)
if applicable, the transfer of benefit rights from this Plan to another plan, or
(iv) the direct deposit of benefit payments to an account in a banking
institution shall not be construed as an assignment or alienation.  In the event
that any Participant's or beneficiary's benefits hereunder are garnished or
attached by order of any court, the Administrator may bring an action for a
declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid under the Plan.  During the pendency
of such action, any benefits that become payable shall be held as credits to the
Participant's or beneficiary's Deferred Benefit Account or, if the Administrator
prefers, paid into the court as they become payable, to be distributed by the
court to the recipient as it deems proper at the close of such judicial
preceding.

     10.3  No Employment Contract.  The establishment of this Plan shall not be
           ----------------------                                              
construed to confer upon any Senior Executive the legal right to be retained in
the employ of the Employer, or give a Senior Executive or any beneficiary, any
right to any payment whatsoever, except to the extent of the benefits provided
for hereunder.

     10.4  Incompetent Recipient.  If the Administrator determines that any
           ---------------------                                           
person to whom a benefit is payable under the Plan is incompetent by reason of
age or physical or mental disability, the Administrator shall have the power to
cause the payments becoming due to such person to be made to another for his
benefit without any responsibility to see to the application of such payments.
Any payment made pursuant to such power shall, as to the amount of such payment,
operate as a complete discharge of the Employer.

     10.5  Questions of Identity.  If at any time any doubt exists as to the
           ---------------------                                            
identity of any person entitled to any payment hereunder or the amount or time
of such payment, the Employer shall cause such sum to be held in the Rabbi Trust
until such identity, amount or time is finally determined or until a final

                                       19
<PAGE>
 
order of a court of competent jurisdiction is obtained.  Notwithstanding the
foregoing, the Employer shall also be entitled, in its sole discretion, to cause
such sum to be paid into court in accordance with the appropriate rules of law.

     10.6  Effect on Other Benefits.  The benefits of each Participant shall be
           ------------------------                                            
in addition to any benefits paid or payable to or on account of the Participant
under any other pension, disability, equity, annuity or retirement plan or
policy.  However, any supplemental retirement income credited under this Plan
shall not be deemed part of the Participant's total compensation for the purpose
of computing benefits to which he may be entitled under any pension plan or
other supplemental compensation arrangement, unless such plan or arrangement
specifically provides to the contrary.

     10.7  Waiver of Liability.  No liability shall attach to or be incurred by
           -------------------                                                 
any officer or director of the Employer under or by reason of the terms,
conditions and provisions contained in this Plan, or for the acts or decisions
taken or made thereunder or in connection therewith; and as a condition
precedent to the establishment of the Plan or the receipt of benefits hereunder,
or both, such liability, if any, is expressly waived and released by each
Participant and by any and all persons claiming under or through such
Participant.  Such waiver and release shall be conclusively evidenced by any act
of participation in, or the acceptance of benefits under, the Plan.

     10.8  Conflicts.  In the event of any conflict between the terms and
           ---------                                                     
conditions of an Investment Option and the terms and conditions of this Plan,
the terms and conditions of the Investment Option shall control.

     10.9  Amendment and Termination.  The Chairman of the Board shall have the
           -------------------------                                           
sole authority to modify, amend or terminate the Plan, provided that no
amendment or termination shall have an adverse effect upon rights which have
vested or upon amounts which are being paid as of the date of such amendment or
termination.  Should this Plan be terminated, each Participant shall receive
written notice of when such termination shall be effective.

           10.9.1  Notwithstanding the provisions of this Section 10.9, the Plan
and the Trust Agreement may be amended at any time, retroactively if deemed
necessary in the opinion of the Administrator, in order to ensure that the Plan
is characterized as a non-qualified plan of deferred compensation maintained for
a select group of management or highly compensated employees, as described under
Code section 451 and under sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and to
conform the

                                       20
<PAGE>
 
Plan and the Rabbi Trust to the provisions and requirements of any applicable
law (including ERISA and the Code) and to ensure that the Rabbi Trust is
characterized as a grantor trust as described in Code sections 671 through 679.
No such required amendment shall be considered prejudicial to any interest of a
Participant or beneficiary hereunder.

            10.9.2  This Section 10.9.2 shall become operative on a complete
termination of the Plan.  The provisions of this Section 10.9.2 shall also
become operative on a partial termination of the Plan, as determined by the
Chairman of the Board, but only with respect to that portion of the Plan
attributable to the Participants to whom the partial termination is applicable.
Upon the effective date of any such event, notwithstanding any other provisions
of the Plan, no persons who were not theretofore Participants shall be eligible
to become Participants, and all nonvested interests of Participants not yet
fully vested shall be forfeited unless the Chairman of the Board otherwise
provides for full vesting.  The value of the vested interests of all
Participants and beneficiaries shall be determined and, after debiting such
Deferred Benefit Account with its allocable shares of the estimated expenses
arising from the liquidation of the Plan, the vested balance in each
Participant's Deferred Benefit Account shall be paid to them as soon as is
practicable after such termination.  In the sole discretion of the Chairman of
the Board, this payment may be made through the transfer to a Participant of the
Insurance Policy on his life, as long as the terms of the Insurance Policy
contemplate and authorize such a transfer.

     10.10  Suspension of Credits.  The Chairman of the Board shall also have
            ---------------------                                            
the authority to suspend operation of the Plan on a temporary or a permanent
basis.  In the event of such suspension, the Employer shall continue all aspects
of the Plan, other than the crediting of Deferral and Matching Contributions,
during the period of the suspension.  Benefit payments will also continue to be
made during the period of the suspension in accordance with the provisions of
the Plan.

     10.11  Severability.  Should any provision of the Plan or any regulation
            ------------                                                     
adopted thereunder be deemed, or be held, to be unlawful or invalid for any
reason, such fact shall not adversely affect the other Plan provisions or
regulations, unless such invalidity shall render impossible or impractical the
functioning of the Plan, and, in such case, the Chairman of the Board shall
immediately adopt a new provision or regulation to take the place of the one
held illegal or invalid.

     10.12  Notices.  Any notices required or permitted to be given under this
            -------                                                           
Plan shall be sufficient if in writing and if sent by certified mail, postage
prepaid or if delivered by a nationally

                                       21
<PAGE>
 
recognized overnight delivery service to the last known address of the
Participant as shown on the Employer's personnel records or to the principal
executive offices of the Plan Sponsor, marked to the attention of its General
Counsel, as the case may be.

     10.13  Governing Law.  The Plan shall be governed by the internal laws of
            -------------                                                     
the Commonwealth of Pennsylvania, without regard to conflict of law principles.

     10.14  Binding Effect.  This Plan shall be binding upon each Senior
            --------------                                              
Executive, his personal or legal representatives, executors, administrators,
heirs, successors and assigns.  In the event of a merger, consolidation, or
reorganization involving the Employer, this Plan shall continue in force and
become an obligation of the Employer's successor or successors.

     10.15  Gender and Number.  Whenever used in the Plan, the masculine shall
            -----------------                                                 
include the feminine and the singular shall include the plural.

     10.16  Headings.  The article and section headings contained herein are for
            --------                                                            
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of the Plan.

ARTICLE XI.  ADOPTION
---------------------

     To record the adoption of this Plan, the Plan Sponsor on behalf of itself
and the other Employers has caused its duly authorized officers to execute this
instrument as of the 1st day of January, 1998.

Attest:                            RADNOR HOLDINGS CORPORATION



/s/ Caroline J. Williamson         By:  /s/ Michael T. Kennedy
---------------------------           ---------------------------       
Secretary                             Chairman

                                       22